Fitch: European investors expect US to avoid ‘fiscal cliff’


More than 80 per cent of European fixed income investors expect the US to avoid the fiscal cliff, according to Fitch Ratings quarterly fixed income survey.

The survey revealed 82 per cent of investors expected the US politicians to solve the problematic ‘fiscal cliff’ – a combination of tax increases and budget cuts due to be enacted at the beginning of 2013.

Just 5 per cent of respondents to the survey thought the fiscal cliff would trigger a US recession with negative global repercussions.

The ratings agency believes the fiscal cliff would tip the US economy into an “unnecessary and avoidable recession” and cause the unemployment rate to increase beyond 10 per cent in 2013.

The fourth quarter survey was conducted between 2 October and 6 November and represents the views of managers of an estimated $7.4trn of fixed-income assets.